How to Project Rental Income (and What Rent Growth to Assume for 2027)

Every rental calculator and every pro forma has a rent-growth box. You can type any rent growth assumption you want, and nothing in the spreadsheet stops you. With national rents flat, that single input is often what decides whether a deal looks like it works. This is how to project rental income so the growth box cannot underwrite the deal for you.

The sequence below builds the income stack, reads where rents are, picks one rent growth assumption for the metro, and stress-tests the rental cash flow projection before that number sets the offer.

How to Project Rental Income, From Scheduled Rent to NOI

A rental income forecast is a stack, repeated each year you plan to hold. It starts with the rent you can advertise, then subtracts what you will not collect, then subtracts what it costs to operate the property. A rent projection that only grows the top line skips the two steps that decide whether any of that rent reaches you.

Gross scheduled rent is the rent on the lease, or the market rent you believe you can sign, multiplied by 12. It assumes the unit is occupied and the tenant pays. It is the ceiling, and it is the only line a rent growth assumption touches directly.

Effective gross income is what remains after vacancy and credit loss. Vacancy is the time the unit is empty between tenants. Credit loss is rent you billed and did not collect: partial payments, skips, and concessions that never become cash. They are different events, and both belong in the rental income forecast before you talk about growth. For how to choose the vacancy piece, use what vacancy rate to use on a rental property.

Net operating income is effective gross income minus operating expenses: taxes, insurance, utilities you pay, HOA, repairs, turnover, property management, and a capital reserve. The mortgage is not in NOI. It comes off after NOI, when you get to cash flow. A rent growth assumption that never survives vacancy, credit loss, and operating expenses has not been tested against the thing you actually deposit.

Will It Flow's multi-year projections follow that stack one year at a time. Year 1 uses the rent you typed. Growth starts in year 2, and vacancy applies to that rent instead of disappearing because the growth box looked comforting. Copy that order when you project rental income by hand: defend this year's income first, then ask a separate question about later years.

Where Rents Are Now

The reason the growth box is so powerful in 2027 is that the national rent series are flat. There is little recent inflation sitting in the data to lean on, so whatever you type is mostly a forecast.

Apartment List's October 2026 National Rent Report, using September 2026 data, put the national median rent at $1,388. Rent fell 0.1% month over month, the first monthly decline since January, and 0.4% year over year. Apartment List still says 2026 is on track for positive full-year growth. Had rents followed the 2017–2019 trend, the median would be $1,394, which is another way of saying rents are back near the long-run trend. Apartment List, October 2026 National Rent Report.

Zumper's October 2026 National Rent Report reads the market a different way. The national median one-bedroom was $1,519 and the national median two-bedroom was $1,901. The same report notes that the September CPI showed shelter up 0.4%, the biggest monthly gain since April. Zumper National Rent Report.

Those two paragraphs can both be true, and they are a poor pair to average. Apartment List is reporting a national median rent. Zumper is reporting asking rents for a one-bedroom and a two-bedroom. CPI shelter, and the rent-of-primary-residence series in the chart below, tracks what tenants in existing leases are paying, which moves after asking rents do. Different rent indices measure different things. Pick one source for your market and use it every time you update the rent growth assumption. Mixing a median, an asking rent, and a lease index in the same pro forma is how a rental income forecast picks up a trend that none of the sources actually showed.

The line is the year-over-year change in rent of primary residence, computed from the monthly index. It tracks leases already signed, so it moves after asking rents do. Use it as the backdrop. Use the one local index you chose when you type a rent growth assumption for a specific property.

How to Pick a Rent Growth Assumption

Pick the rent growth assumption in five steps. The order matters more than the percentage. Growth is step four. The deal has to make sense before you get there.

1. 1

   Start from current market rent for this unit. Pull rent comps for the same bedroom count, similar condition, and a realistic radius, in the condition the property will be in on day one. HUD Fair Market Rent is a floor check against that comp. It is the wrong number to type just because it is higher.

2. 2

   Choose one index for the metro and keep it. Asking rents, a median rent series, or the lease index — one of them, for the same geography, every time you revisit the deal. A national figure pasted into a city model is a different market.

3. 3

   Underwrite year 1 at flat rent. The tenant you inherit, or the tenant you sign at closing, pays today's rent. Year 1 of the rental cash flow projection uses that number with growth at zero. If year 1 needs a raise that has not been signed, you are modeling a different property than the one for sale.

4. 4

   Apply growth only from year 2. A renewal or a new lease is the first moment a higher rent can show up. Compound from there. This is also how Will It Flow's hold analysis works, so a model you build on paper and a model you run in the product describe the same years.

5. 5

   Cap growth at the metro's own recent history. If the index you chose has been flat or down, the assumption you type should stay inside that recent path. Where you cannot find a local series you trust, cap the assumption at zero and treat any later increase as upside.

You can run both cases in the rental property calculator: once with year-1 rent and zero growth, once with the capped rate applied after year 1. Save the flat case. That is the deal you are buying. The second case is what a renewal might add if the index you trust keeps doing what it has recently done.

Set the comps before you touch the growth cell. If you grow rent in later years, leave your expense assumptions in the model. A rental income forecast that raises income and freezes every cost is a sales sheet.

Stress-Test Your Rent Projection

A stress test is the same deal at more than one rent path. The base path is flat. The other paths are the growth rates you are tempted to believe. You are looking for the gap in dollars, and for whether cash flow exists before that gap arrives.

The chart below uses one starting rent, the Apartment List national median of $1,388 in September 2026, and four annual rates: 0%, 1%, 2%, and 3%. Each bar is the extra gross scheduled rent over five years versus holding that rent flat. Year 1 stays at $1,388 on every path, and growth compounds from year 2, the same rule as the product's multi-year projections. These figures are the top line. Vacancy, credit loss, operating expenses, and the mortgage have not been subtracted.

On that illustration, five years at flat rent is $83,280 of gross scheduled rent. At 2% growth from year 2, the five-year total is $86,678. At 3%, it is $88,429. The gap between flat and 3% is $5,149 of gross rent over the whole hold, before vacancy and expenses. That gap will not carry a year-1 loss.

Run that comparison on full cash flow, not only on gross rent. Hold price, loan, taxes, insurance, and vacancy at the figures you would actually underwrite, and change only the rent path. If monthly cash flow is negative at 0% and turns positive only on the 2% or 3% path, the deal does not cash flow. You might still buy it for a renovation you can document or a below-market lease you have already comped. The file you show a partner should keep the 0% case, with the grown case labeled as upside. Pair it with the vacancy stress test in the vacancy rate guide. A deal that needs both low vacancy and rising rent is two forecasts at once.

Local Markets Differ

National medians are a backdrop. The rent you underwrite is local, and official benchmarks already disagree by city. The chart reads HUD's 2-bedroom Fair Market Rent for six cities from Will It Flow's FMR table, using fiscal year 2025, the latest year in that table, and the change versus fiscal year 2024.

In that set, San Francisco, CA is $3,318 and Indianapolis, IN is $1,283. The dollar gap between those two official 2-bedroom rents is larger than several years of the national growth illustration above. A single national rent growth assumption pasted onto both cities is not a rental income forecast. It is one number doing two jobs, and it will be wrong in at least one of them.

Use the bar as a floor check against your comps, then return to the one index you chose for that metro. The percent is the change in HUD's official rent between fiscal years, which can move when the benchmark is reset. It is a different series from Zumper's asking rents and from Apartment List's median. For the market you are buying in, open the housing market dashboard.

The Honest Takeaway

For 2027 the national median is flat to slightly down, so a rent growth assumption has to come from the one index you chose for the metro, capped at that index's own recent path, and it starts in year 2. Project rental income from gross scheduled rent to effective gross income to NOI, then to cash flow after the mortgage. Keep the flat case as the deal you are willing to own. Growth can improve a deal that already works.

See Flat Rent and 2% Growth Side by Side

See your cash flow at flat rent and at 2% growth, side by side. Will It Flow runs year 1 at the rent you enter and applies a rent growth assumption from year 2, so the flat case and the upside case are the same deal with one input changed. Vacancy, expenses, and the loan stay in both.

See your cash flow at flat rent and at 2% growth, side by side